Microsoft’s (MSFT) quarterly sales and profit rose more than forecast, driven by corporate demand for the software maker’s cloud and artificial intelligence offerings.
Revenue in the third quarter, ended March 31, rose 17% to US$61.9 billion, while profit was US$2.94 per share, the company said in a statement on Thursday (25). Analysts, on average, estimated earnings per share of $2.83 on sales of $60.9 billion.
CEO Satya Nadella has been encouraging the use of AI technology, from the partnership with OpenAI, across Microsoft’s product line. The bet is starting to pay off, with some customers adding AI tools that summarize documents, generate new content to their Office productivity software or Azure cloud subscriptions, or purchasing more cloud services that allow them to create and run their own AI applications.
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“Microsoft’s specific generative AI recipe has already become a major stock driver“, said Dan Morgan, senior portfolio manager at Synovus Trust Co. “Microsoft is really in the driver’s seat when it comes to AI.”
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Azure revenue grew 31% in the quarter, above an average forecast of 29%, recovering slightly from 30% growth in the previous period.
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Microsoft shares rose about 6% in late trading. It closed at US$399.04 in New York. Shares rose 12% in the quarter through March on optimism that the company’s early lead in launching generative AI products would boost sales.
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Tags: Microsoft sales profit beat expectations strong demand
